The Federal Reserve Bank of New York has guaranteed Morgan Stanley a global coordinator's role in any initial public offering (IPO) of American International Group units, documents made public on the New York Fed website show.

According to the documents, Morgan Stanley will earn percentage fees from the NY Fed if AIG sells any of its businesses, in addition to an initial $4 million payment as an advisory fee and $2.5 million per quarter.

Morgan Stanley will also bill the New York Fed separately for expenses, including document production and travel costs, the bank said on the website.

The bank must get permission for expenses beyond $5 million, according to the documents.

AIG has already begun the process for an IPO of American International Assurance Co Ltd (AIA) early next year, selecting Morgan Stanley and Deutsche Bank AG as global coordinators for the offering.

The company also said last week it was splitting off American Life Insurance Company, or Alico, in anticipation of a public sale of shares in New York.

The U.S. Federal Reserve and U.S. Treasury have together loaned AIG some $83 billion since last September as part of a larger federal rescue that saved what was once the world's largest insurer, from bankruptcy.

It was not immediately clear how much Morgan Stanley would earn from the arrangement. Bloomberg News reported the bank may earn about $72 million on the public listing of AIG's American International Assurance, an Asian insurer to be listed in Hong Kong, according to its own calculations based on figures disclosed by the New York Fed.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Maureen Bavdek)

Investment Morgan Stanley Aig